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How to Insure Investment Risks?

18 January 2018, 14:00 CET

Professional investors are looking not only for a promising way of earning money but also a way to insure their profits so that they do not lose their source of income.

The best way to do so is the so-called diversification. It is the division of the total amount of investments into several projects. So, for example, you can invest in stocks, put money into a bank, and also engage in stock trading. What is the advantage here? The fact is that if one of your investments burns out (for example, the company whose shares you invested in will go bankrupt), you will have other assets, the profits of which will surpass your losses and lead to the final plus. It is exactly what educated investors do when they plan their revenue structure.

Main and Additional Sources of Income from Investments

Consider the following advice about investments' diversification. The main income can come from trading on the Forex as there are huge opportunities to multiply profits in case of the right approach. You can work on the ecn trading platform to make this activity your main and the most profitable of all. It will take away some personal time, although not so much, only 1-2 hours a day that if you wish.

It turns out that you can use not one, but several ways to invest, described below. It will insure your risks from a sudden error or external factors. It is not necessary that all methods should be connected to the Internet. It will be better if you invest in different spheres of business activity. For example, let's briefly describe how the structure of your investment portfolio can look like:

  • Investment in shares of large national and international companies. It will possibly not bring much to you in terms of net profit, but you can sell the stock at any time if it is necessary. Periodically, it's essential to monitor the market, but it does not take too much time, maximum 5-6 hours in total for a month.
  • Assets in real estate. You can rent some properties and receive additional income. Real estate can also be sold, if necessary. It does not take away much personal time.
  • Part of the capital in the bank account. You may have money growing in deposits. It's up to you if to put much in the bank or not.

Such structure of income will create confidence for you that you will not lose profits even in case of your own mistakes or some external factors. You can choose only one option, which seems to be the most promising for you, but then, as you succeed in it, you must diversify your investments. At the same time, you will not only insure risks but also get experience in different spheres, which is sure to come in handy in the future.

Another important point - watch your time. If you choose several investment options, most of them must be passive and do not require your direct action. Otherwise, you risk devoting nearly all the time to work or monitoring activity and do not leave time for rest and pleasure. Everything is good if in balance.

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